Pichay posts bail in bank buyout case
Surigao del Sur Rep. Prospero Pichay. INQUIRER FILE
Surigao Del Sur Rep. Prospero Pichay has posted his bail bond from graft and malversation charges for the anomalous buyout by the Local Water Utilities Administration (LWUA) of an insolvent bank in 2009 when he was then LWUA chair.
According to an order by the Sandiganbayan Fourth Division, Pichay posted a P250,000 bail bond on Tuesday for provisional liberty from his three counts of graft, three counts of malversation, one count of violation of the Manual of Regulation for Banks, and one count of violation of Republic Act 8791 or General Banking Law of 2000.
The order was signed by Associate Justice Geraldine Econg.
The court set his arraignment on Aug. 15 at 8:30 a.m.
Pichay posted bail ahead of the Sandiganbayan’s ruling finding probable cause to put him on trial.
Pichay was accused of leading the purchase by LWUA of 60 percent equity in Express Savings Bank Inc. (ESBI) to save the insolvent bank from bankruptcy.
The Laguna-based thrift bank is owned by Forum Pacific Inc. (FPI) as well as the Wellex Group, the company of the family of Senator Sherwin Gatchalian. He and members of his family also faced charges for the buyout.
READ: Gatchalian seeks dismissal of LWUA case
Pichay has filed a motion to dismiss the case for lack of probable case, arguing that he could not be charged because he did not violate any banking regulations in the buyout.
READ: Pichay seeks dismissal of bank buyout case
According to the Ombudsman, Pichay and other LWUA officials approved the acquisition of the insolvent bank in 2009 despite audit findings that show that the bank suffered net losses and capital deficits for five straight years from 2005 to 2009.
The acquisition took the effect of a financial rescue, as the LWUA officials bought 445,377 ESBI shares worth P101.363 million from the Gatchalian group that gave the agency 60-percent equity in the bankrupt bank.
Pichay and the other officials later injected P780 million LWUA funds to the bank to increase its authorized capital stock.
The Gatchalians of Wellex and other owners of the bank were also paid P80 million in the acquisition.
READ: Gatchalians say raps a political vendetta
The LWUA made the acquisition and transactions despite warnings by the Bangko Sentral ng Pilipinas (BSP), the Monetary Board of the BSP, and the Department of Finance (DOF) about the ESBI’s fragile financial condition following a due diligence review that showed high liquidity and credit risks.
The acquisition was also made without the requisite regulatory approvals from the BSP, its Monetary Board, the DOF, and the Office of the President.
In ordering the filing of charges with the Sandiganbayan, Ombudsman Conchita Carpio Morales said “in view of the bank’s precarious financial standing at the time of the sale, the windfall received by herein private respondents must be deemed unwarranted benefit, advantage or preference.” JE/rga
READ: Winning senator Gatchalian indicted over anomalous bank deal
